Japan’s Financial Services Agency (FSA) is preparing a dual-track regulatory strategy to comprehensively integrate digital assets into its financial landscape, according to a report from Nikkei.
The first track involves a formal request for a tax code review by the end of August. The agency will propose moving cryptocurrency gains out of the “miscellaneous income” bracket and into a separate taxation category.
This new structure would impose a flat 20% tax rate and incorporate a three-year loss carry-forward mechanism, mirroring the treatment of traditional securities.
The second track is a planned 2026 legislative bill to reclassify crypto assets as “financial products” under the Financial Instruments and Exchange Act, moving them from their current status as a “means of payment.”
This foundational legal shift is a prerequisite for authorizing domestic crypto ETFs. This regulatory modernization occurs alongside the anticipated approval of Japan’s first regulated yen-denominated stablecoin, JPYC.
